SME barometer: Slowing inflation and falling interest rates raise business cycle expectations of SMEs
Business cycle expectations of small and medium enterprises have clearly risen since last spring. This has been influenced by lower inflation and lower interest rates.
The direction of the economy depends a lot on, among other things, the recovery of private consumption and the drop in interest rates, both of which are associated with uncertainty and whose development is followed with an expectant mood. SMEs anticipate that the state of the economy will remain unchanged during the next year.
The investment willingness of SMEs is still at a modest level. In all main industries, there are more companies reducing investments than those where investments are expected to increase. However, compared to the spring barometer, the recruitment intentions of SMEs seem to have strengthened. 14 percent of SMEs plan to increase the number of their staff, while 11 percent expect it to decrease. However, the largest group, 74 percent of SMEs, plan to keep their current staff.
The growth orientation of SMEs has been declining for a long time, but now the figures show stabilisation. More than a third of SMEs are either strongly or as far as possible growth-oriented. Among the positives are the strong future prospects of companies employing 20–49 people. These companies act as drivers of growth and spreaders of new innovations.